In January 2008, my colleague Jay S. Fleischman wrote an article about a bankruptcy judge in New York that fined Navy Federal Credit Union ("NFCU") over $13,000 for continuing to contact a debtor in violation of the U.S. Bankruptcy Code. I will soon have the opportunity to take legal action on behalf of a client who is currently on active duty in the Navy that has been similarly harassed by NFCU.
Under the California Rosenthal Fair Debt Collection Practices Act, creditors cannot legally contact consumer debtors that are represented by an attorney. Despite several phone calls from my office and written confirmation that we represented the debtor, the contact continued. NFCU is accused of (1) using profanity with my client; (2) threatening to call my client’s commanding officer about the debt; (3) threatening to garnish my client’s wages while he is on active duty and when a judgment did not exist; and (4) telling my client that he was a "disgrace" to the military.
Even after I filed the bankruptcy, NFCU continued to contact my client. So far, NFCU has sent my client 3 letters since we filed his bankruptcy petition. Each letter acknowledges notice of the bankruptcy filing and threatens to continue reporting negative information on my client's credit report, all in violation of the bankruptcy automatic stay. The continued contact with my client is also violates the California Rosenthal Act because my client has legal representation. I will be filing a motion for sanctions against NFCU in the very near future.
About the Author: Carl H. Starrett II has been a licensed attorney since 1993 and is a member in good standing with the California State Bar and the San Diego County Bar Association. Mr. Starrett practices in the areas of bankruptcy, business litigation, construction, corporate planning and debt collection.
Under the California Rosenthal Fair Debt Collection Practices Act, creditors cannot legally contact consumer debtors that are represented by an attorney. Despite several phone calls from my office and written confirmation that we represented the debtor, the contact continued. NFCU is accused of (1) using profanity with my client; (2) threatening to call my client’s commanding officer about the debt; (3) threatening to garnish my client’s wages while he is on active duty and when a judgment did not exist; and (4) telling my client that he was a "disgrace" to the military.
Even after I filed the bankruptcy, NFCU continued to contact my client. So far, NFCU has sent my client 3 letters since we filed his bankruptcy petition. Each letter acknowledges notice of the bankruptcy filing and threatens to continue reporting negative information on my client's credit report, all in violation of the bankruptcy automatic stay. The continued contact with my client is also violates the California Rosenthal Act because my client has legal representation. I will be filing a motion for sanctions against NFCU in the very near future.
About the Author: Carl H. Starrett II has been a licensed attorney since 1993 and is a member in good standing with the California State Bar and the San Diego County Bar Association. Mr. Starrett practices in the areas of bankruptcy, business litigation, construction, corporate planning and debt collection.
9 comments:
Mr. Starrett. I read your blog and I just wanted to say kudos. I do not have a similar situation except that I am a Navy Federal Customer. I am separated from the Air Force but lost my civilian job 2 years ago. I wrote Navy Federal a hardship letter and they continue to call me even though I told them I went from a 38,000 a year job to a waitress job where I make $8.00 an hour. They told me I was one of millions of customers and and they just wanted their payment regardless of my situation. At any rate I'm glad I'm not the only one who does not agree with their customer service tactics. Thank you for the opportunity to read your blog.
Wow I work for NFCU and have also applied for bankruptcy most of my debt it with NFCU they have also send me letters of about my bankruptcy I don’t say anything cause I need to keep my job since they can not firer me base on me applying for bankruptcy
I am currently working on another blog entry about another client that was victimized by Navy Federal Credit Union. Stay tuned.
Carl Starrett represented my husband and me for our Chapter 7 Bankruptcy. Navy Federal Credit Union continued to contact us repeatedly even after we had retained an attorney and provided Navy Federal Credit Union with his contact information. We did this multiple times. I informed them I had been on disability, lost my job etc. Even so, we continued to receive letters from Navy Federal Credit Union which threatened to repossess our only car, to which they held the title for an auto loan which was not/never in default. Navy Federal Credit Union is aware of the laws and chose to continue violating them anyway. If you Google Navy Federal Credit Union and the words fined, violated stay, harassed, you will find several complaints. Out of all the creditors we had to deal with Navy Federal Credit Union was by far the worst, unprofessional and stressful.
My daughter worked for three large companies here in the Florida panhandle area, and each one moved or closed or considerably reduced their operations. Being a small town, she had not much choice of where to work and ended up making about half of what she made in the past. She's been working two jobs several years now just trying to make ends meet. She was a member of NFCU and signed up for their debt relief/management program that they told her would get her out of debt in 3 years if she followed the plan. She faithfully followed the plan. The program was awful. She had five different counselors over the past two years. They have lost half of her files/paperwork. To make a long story short, she ended up owing more than when she started out with them. Now, I think due to all the financial stress and overwork, she has cancer; and will have surgery this week. We've had three harassing calls from NFCU because her November credit card payment is past due. She told them ahead of time this was going to happen. I think NFCU practices are a disgrace. And their debt relief/management program needs to be investigated.
I too have filed for chapter 7 and I am continually called by NFCU on a daily basis regarding my credit card account. The latest message they left stated that they were now going to garnish my wages and put a lien on my house. This is funny because they are foreclosing on my house as I lost my job of 26 years last July and am drawing unemployment benefits which they stated they wanted a piece of.... I would NEVER do business with the NFCU EVER again, and I have been a customer in good standing for over 30 years. My attorney is dealing with them and I hope he gets them fined.
I have read all these comments and I am concerned. I am retired Navy and just had to leave my current job to go on disability. I have a credit card, personal loan and 2 car loans with NFCU and I have already fallen behind on all but one of the car loans. NFCU has already started calling me. Today while I was on the phone with NFCU I had 2 other people from NFCU calling and leaving messages on my cell. As it stands I will probably have to file bankruptsy because I wont be getting enough on disability to cover my debt. I get enough from my military retirement and VA disability to pay my mortgage, keep my lights on and have food on my table, but thats it. I will probably need to get an Attorney. It sucks that I served my country for 20 years and now it comes down to being unable to support myself and my family, but I will do the best I can.
Carl, I'm a bankruptcy lawyer in Virginia. Navy Federal seems out of line in dealing with my clients, too.
I have a recent client who fell behind on her second mortgage with them, and Navy Fed took the baby sitting money earned by her young children. Your readers might be interested in what I say about that.
http://robertweed.com/blog/before-bankruptcy/navy-federal-takes-money-from-children/
I too am dealing with NFCU in regards to my account and a former joint account with another member (my mom). Apparently someone didn't do their job and take my name off this joint account after I turned in the correct form to do so, a few years ago. Imagine my surprise to find out that I owe money on a debt from that joint account! After going back and forth on this issue with the bank, I paid the amount just to be done with it. I also filled out ANOTHER form to remove my name from said account. Well, my name was removed on the spot (which I found out was NOT the proper procedure!), then I was told that I did NOT owe that money and to go back to the bank to get it back (which I did). Well, I got a call this morning from the manager of the branch that I use telling me that I need to come back in WITH that money to pay it again because I DO owe it. Whenever I asked them to pull up my mom's account that I was a joint holder of, they stated that they CAN'T because my name is NOT on the account anymore. BUT they want me to pay this bill because it WAS on the account. Also, my mom had already paid this bill in 2009 and simultaneously CLOSED the account as well. I was told by one of their collections people that the account was paid and closed and there is no debt what so ever. When I brought this up to the branch manager here, she plainly stated that "Well, if they updated your mom's account, they didn't update your's and the system is telling me that you are responsible for this account. So you need to pay". Hmm...needless to say, it's very frustrating! They want me to pay the bill for an account my name is NOT on anymore , but they won't pull up the account in question because my name is NOT on the account. Does this make sense? And why does one party of this institution tell me that the debt was paid and the bank branch keeps telling me it needs to be paid?!?! Ugh.
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